Blue Cross Blue Shield VT postpones controversial change to therapy billing 

Savannah Lord, the clinical director of a Burlington nonprofit mental health clinic, got an email from Blue Cross Blue Shield of Vermont this month and was immediately alarmed, as were many of her colleagues across the state.

What transpired since then provides a small window into the highly complicated world of health insurance in the United States, where even the insurers who set reimbursement rates, and the providers who bill for them, can become confused. That complexity can also get in the way of efforts to improve patient care.

The Nov. 5 email from Tom Weigel, the chief medical officer for the state’s largest private insurer, explained a billing change the insurer planned to implement. Starting in January 2026, unlicensed mental health providers would receive 24% less in payment for services than their licensed counterparts.

The change, Weigel wrote, was intended to encourage those unlicensed providers to complete their licensing requirements, and to align the private insurer’s reimbursement practices for mental health services with those of Vermont Medicaid. The insurer had found upon review that “trainees were practicing for many years without clear progress toward licensure. Some even practicing more than 10 years as trainees.” 

Lord knew right away the change would be a massive financial blow to her clinic, called Eden Valley, which treats patients of all ages. Four of the clinic’s six staff members are pre-licensed supervisees. Nearly 75% of Eden Valley’s revenue comes from patients covered by Blue Cross Blue Shield of Vermont. 

“This is how we keep the lights on; this is how we pay utilities. This is how we pay our taxes. This is how we function,” Lord said.

Also, something didn’t sit right with Lord about the letter’s explanation of mirroring Vermont Medicaid rates for mental health: The state’s program for lower-income Vermonters has paid the same rate for all of Eden Valley’s practitioners, licensed or not.

“The insinuation that we have been overpaid all of these years is quite scary,” Lord added. 

In the days that followed, mental health providers in and around Burlington quickly rallied against that Blue Cross Blue Shield of VT proposal. They circulated a protest form letter among patients and other clinicians and on the popular Burlington Facebook group Sensi-Babeington. The letters said that the reduction would result in fewer therapists entering training and even further reducing the number of therapists and social workers in a state where they are already scarce, particularly those who take insurance.

This week Blue Cross Blue Shield of VT informed mental health providers that it would pause implementation of the policy to gather more information. 

“We’ve received feedback from some of our network providers who disagree with the change, and we take that feedback seriously,” company Vice President Andrew Garland said in an emailed statement to VTDigger.

“We think we have this right, but we are going to postpone the policy start date so we have more time to discuss the policy change with our network providers and community leaders,” he wrote.

Savannah Lord. Courtesy photo

(Mis)alignment with Medicaid

The licensure process is an important part of consumer protection, said Lynn Currier, a licensed inpatient clinical social worker and the executive director of the Vermont and New Hampshire chapters of the National Association of Social Workers. 

The process ensures that practitioners have passed their qualifying exam and that they are participating in the continuing education required to maintain a license, she said.

“When I look at Blue Cross Blue Shield’s reasoning, (and) that they’re seeing people who never get out of the trainee status, they’re not wrong,” Currier said. “There are clinicians who’ve been working decades without a license, because they can work under the license of somebody else, and that’s a problem.” 

But ensuring that insurers and regulators have the tools to assess a provider’s licensure status is complicated. 

One issue is that many types of mental health professionals can practice in the state of Vermont without a license, explained Lauren Hibbert, deputy secretary of state. To practice this way, a provider is required to enroll in what her office calls the roster of non-licensed, non-certified clinicians, giving the state a way outside of licensure to monitor who is providing mental health care in Vermont. 

Some of the mental health professionals on the roster have degrees in psychology, social work or counseling and are working toward full licensure. To achieve that, a trainee must log around two years of practice, meeting with clients and providing clinical care under the supervision of an already-licensed clinician. 

Another group of therapists on the roster may be career-long unlicensed practitioners, who might offer different kinds of mental health therapy, may not be able to pass the licensure exam, or may have not completed their education. There are many mental health care professionals who may never intend to pursue licensure, Hibbert said.

The distinction between the two tracks — those who are working toward licensure and those who stay in this unlicensed, rostered status for long periods — can easily become muddled. 

Blue Cross Blue Shield’s Weigel wrote that the reduction in reimbursements for pre-licensed clinicians “aligns with Medicaid to create consistency, reduce incentives for trainees to remain unlicensed, and focus resources on high-quality, well-supervised care that benefits members.”

But, in fact, it did not align with Medicaid’s rates for unlicensed therapists.

Vermont Medicaid does indeed reimburse many trainees at 76% of the program’s set fee schedule, which does seem to parallel what BCBS VT initially proposed. But, the state program also reimburses many fully licensed therapists the same percentage.

Medicaid distinguishes its billing rates based on the provider’s education status, not their licensure status, explained Alex McCracken, a spokesperson for the Department of Vermont Health Access, which administers Medicaid. 

A psychiatric physician or nurse practitioner receives 100% of the Medicaid set rate for a clinical mental health service. A psychologist with a PhD receives 93% of that full fee; a psychologist with a master’s level degree receives 76% of that allowed amount. This is true regardless of whether they have achieved their license yet. 

This has been the case since the inception of this supervised billing structure, nearly a decade ago, in 2016, McCracken said. DVHA has no plans to change that, she added.

‘We need to get this right’

Still, the concerns of long-rostered, unlicensed clinicians that Blue Cross Blue Shield initially set out to address remain.

Both DVHA and the state’s Office of Professional Regulation are trying to make it easier to tell who is working toward their license and for how long, officials there said. 

Starting in 2026, DVHA will require non-licensed providers to enroll individually with Vermont Medicaid and appear on the claims submitted for reimbursement — rather than submitting under their supervisor.

“This change helps DVHA ensure providers billing under the supervised billing system are working towards licensure,” McCracken explained. 

Previously, the department had tried to address this by implementing a five-year billing limit for rostered professionals. That rule will sunset at the end of 2025, after DVHA received feedback from providers who found the rule difficult to operate under, as it took some people longer to complete their training.

The Office of Professional Regulation is exploring proposals from a 2024 report that recommends changes to better streamline licensure in the state.

One idea, that would require a legislative change, could be implementing two different types of credentials for unlicensed clinicians — one for people training toward licensure and another for individuals who intend to only stay on the roster. Other states, like New Hampshire and Massachusetts, have conditional licenses for trainees working toward full licensure. 

“The public needs to understand that there is a difference between seeing someone who is licensed or someone who is on their way to being licensed than someone who is not licensed and not on their way to being licensed,” Hibbert said. “It makes sense to me that reimbursement follows that.”

In Weigel’s letter to providers, he cited another concern. There is no cap on how many trainees a provider can oversee, “raising concerns about real-time oversight.” The insurer said that some supervisors had reported retaining “all or part” of the reimbursement from their supervisees, leading to worries that hosting trainees might become “a profit center.”

In his statement to VTDigger, Garland said he did not know yet how long this postponement of the rate change will last, but that the insurer will spend the time listening and sharing information with trainees and supervisors. “In the end, we need to get this right for our members. Many Vermonters, including many of our members, are struggling with the cost of healthcare,” he wrote.

Clinicians have their own concerns and criticisms of the current system. Some worry that reducing the amount a supervisee can make will discourage licensed professionals from taking on the administrative burden of a trainee. 

“Supervising a supervisee who’s not yet licensed requires a significant amount of oversight,” said Danielle Bergeron Ingram, a licensed psychologist and the owner of Green Mountain Psychological Associates, in Middlebury. She also sits on the board of directors for the Vermont Psychological Association. 

Bergeron supervises one trainee in her private practice. “Working under my license, there’s a significant amount of time spent reviewing notes, ensuring quality of care,” she said. “I’m reading my supervisee’s notes, any treatment plans, any documents that are produced by the client.” 

With the high overhead cost of going through undergraduate and graduate school to become a therapist, Bergeron Ingram also worries that a lower reimbursement rate will be yet another economic barrier for those trying to become therapists. 

“We are absolutely going to lose people going into the field in the first place.” she asked. “If they’re not compensated fairly, why go into the field?”